This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why I Will Read Greg Smith's Goldman Sachs Tell-All

NEW YORK ( TheStreet) -- Former Goldman Sachs (GS - Get Report) executive Greg Smith has scored his big payday in the publishing world, nabbing what the New York Post reported to be a mind-boggling $1.5 million book deal for the hatchet job he did on the bank with a unit of Hachette Book Group.

Smith shot to sudden fame earlier this month with the vitriolic op-ed he penned for The New York Times, titled Why I Am Leaving Goldman Sachs, and calling out the current heads of the firm as masterminds of a toxic and destructive capitalist culture.

While the Post suggests with its "mind-boggling" description of the price tag for the book deal that the publishers are being treated by Smith like Goldman treats its clients, you don't have to be a Muppet to want to read Smith's Goldman tell-all.

The publishers may have overpaid, but anyone among the 99% that's interested in whether Smith can back up his claims should want to read this book.

Smith's op-ed was a broad brushstroke that anyone who lived through the financial crash could have assumed to be the truth about Goldman, so now it's time for details.

The peanut gallery has certainly been divided over whether Smith is a defender of a higher order of capitalism, a Wall Street version of the tobacco industry whistle-blower, a hypocrite , or just a disgruntled employee.

The most damning, and most quoted, piece of evidence in the Smith op-ed was the fact that Goldman executives referred to clients as "Muppets." Which Goldman executives? Does Smith have emails sent by Goldman CEO Lloyd Blankfein with the subject line: How to fleece the Muppets?

Anyone who has spent more than 90 seconds with an investment banker learns pretty quick that it's a high-priced, well-heeled version of a locker room, with the combatants beating their chests and often engaging in foul-mouthed master-of-the-universe rhetoric.

So who exactly called who a "Muppet" and where is the trail of evidence proving that the "Muppet" philosophy was institutionalized at Goldman, handed on down from the top?

There's plenty of reason to suspect Smith is right, but suspicion doesn't cut it. On the other hand, there's no way that anyone should allow the embarrassing argument that Goldman is in the business of making money decide the case against Smith either. That's the kind of simple-minded defense of capitalism that is as broad and unconvincing as the Smith op-ed.

So Mr. Smith is going to the publishing world, and it's time to back up his claims. If it's not worth $1.5 million to the publishers in terms of how many people will pay to read Smith's story, it's about the only way that Smith can ever claim moral victory. If the legal terms of his employment make it impossible for Smith to offer up a paper trail as he names names, then the book is a non-starter as far as I'm concerned.

In the least, there is reason to play devil's advocate to an executive who predicts doom for the investment bank based on the predatory practices he observed during a total of twelve years' services, considering the history of Goldman , founded 143 years ago in 1869, which includes a long line of dubious capitalist practices that pre-date Smith and can make his view of the firm seem myopic, as well as narcisistic.

The headlines noted on the day of the Smith op-ed that Goldman lost $2.2 billion in market cap in one market session, as if that meant victory for the former employee over the bank. Today, Goldman shares have more than rebounded from that one-day drop. Now Smith needs to make a deliberate, convincing, blow-by-blow winning argument.

-- Written by Eric Rosenbaum from New York.

>To contact the writer of this article, click here: Eric Rosenbaum.

>To follow the writer on Twitter, go to Eric Rosenbaum.

Follow TheStreet on Twitter and become a fan on Facebook.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GS $164.11 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs